8 Comments

After reading over the article in the Times, I find my self confused. While this couple’s expenditures were excessive, do the new bankruptcy laws expect people to just stop living and paying their bills till its settled? If my husband filed for bankruptcy would they take my wedding rings?

Michael Mastro was indicted for bankruptcy fraud. They lied to the court, hid assets and then fled the country. The rings in question are worth $1.4 Million. He defrauded investors out of millions. ALL one’s assets are considered when you file for protection under the bankruptcy laws. To add to the issue by not following the rules, and break some more laws doesn’t give them much of a legal or moral leg to stand on.

Keep in mind that filing for bankruptcy as an individual is different than a corporation. Donald Trump’s companies have filed for bankruptcy multiple times. Mastro’s issue is mostly due to violating federal laws by defrauding investors and individuals and then skipping the country. That’s a big no no.

The Mastros stole approx $300,000,000.00 from investors, lied to a group of “friends and family” investors to steal another $110,000,000.00 more, and then, when creditors and the Feds got curious, the Mastros tried to hide everything from gold, diamonds, a Bentley, Chihuly glass, artwork, a major wine collection, and thousands of other items in a complex web of dubious transactions and deceit. One of their luxury autos was hidden in the West Seattle garage of a Mastro ‘friend’ until Federal agents found it last year (it was sold to benefit creditors). Mastros also sealed bags of coins and other valuables into a wall of their Medina home! It’s all described in transcripts of their bankruptcy case and adversary proceedings. Bottom line: Mike and Linda Mastro are old fashioned crooks, Seattle’s version of the Madoff’s, without conscience or a care for their victims, and deserve to have the book thrown at them.

Mr. Mastro, and by extension his investors, were victims of the 2008 collapse of the real estate market.

He kept all the balls in the air until the economy died.

His intention was to pay his bills when due, to those who trusted him to invest their money. The utter collapse of the market was not his doing.

I note that attorney Rigby has further victimized the creditors with over seven millions of dollars in legal fees, while collecting about one million for distribution to creditors.

Mr. Mastro played fast and loose, yes, but for forty five years the people who were paid on time and in full did not complain. The worst economic disaster since the Great Depression destroyed his empire and ability to make his investors the money he had guaranteed.

As a real estate professional , I have observed Mike Mastro’s operations for years. He played “hard-ball”. Everyone that worked with him knew the rules of the game.
The “game changer” was the US Government ( Barney Frank ) requiring HUD , Fannie and Freddie to purchase “non-conforming” loans, and government influence on lenders to make make Those bad loans. Those loans, fully insured by the “full faith and confidence of the us government” were packaged and sold by Wall Street. When the interest rate on those variable rate loans doubled, the non qualified borrowers, couldn’t make the payments thus defaulted, causing our economic crash. We are now being told by the same political party that it was all Wall Street’s greed that caused the problem, when in fact it was their bungling, ham handed influence on acceptable business practice. Mike Mastro and millions of us are the victims of bad governance. When we vote for amateurs and social fanatics we get bad results. Say what you wish about Mike Mastro, he was no amateur, but it is difficult to play “hard -ball” when the government changes the rules in the middle of the game.
PS Those same people that our Big Hearted Goverment officials were ” Helping” with those bad loans are now much worse off, plus their children and grandchildren will be paying on the “Debt Bomb” used to bail out the banks for many years.
Call me skeptical of “big government”. What was it that Reagon said? “Government is not the solution to our problems, government is the problem”. The Mastro issue is an example of a government run by hacks like Barney Frank.